Lindner against higher billions in subsidies for the Magdeburg plant

Bad Saarow, Berlin Robert Habeck (Greens) is far from giving up. The Federal Minister of Economics definitely wants to bring the US chip company Intel to Germany. The company demands higher subsidies for its planned chip factory in Magdeburg. Federal Finance Minister Christian Lindner (FDP) had given a clear rejection at the weekend.

But Habeck publicly opposed it for the first time on Monday. “A clear commitment from my side: Yes, we want these settlements,” said the Economics Minister at a conference in Bad Saarow, Brandenburg. It’s expensive, but a good investment in the future.

Habeck continued: “If we say no, we will have to bear the consequences.” Germany would then become dependent on other countries and could lose knowledge. At the same time, the settlement in Magdeburg is beneficial for many other companies: “The high investment by Intel is also an investment in mechanical engineering, in laser technology, in optical devices.”

The dispute has been smoldering in the federal government for months. Lindner continued to spur him on in an interview with the Financial Times (FT). “There is no more money in the household,” the British newspaper quoted him as saying on Sunday. “We are currently trying to consolidate the budget, not expand it,” added the FDP leader.

Intel is planning to build a large plant in the state capital of Saxony-Anhalt. When planning began in spring 2021, there was talk of an investment volume of 17 billion euros. In the meantime, however, the group is planning an investment of 27 billion euros, as the Handelsblatt reported at the beginning of the month after information from government circles. On the one hand, this should be related to the increased construction costs due to inflation. Above all, the increase in costs is due to the fact that Intel wants to use more modern technology than previously planned.

Intel boss Gelsinger expected to talks

The increased investment sum puts the federal government under pressure. The chip manufacturer has been negotiating with the Federal Ministry of Economics for months about an expansion of investment aid for the plant in Magdeburg. So far, 6.8 billion euros had been promised, but Intel is now demanding around ten billion euros, according to government circles.

>> Read also: Intel is planning additional costs of ten billion euros in Magdeburg

But there has been no progress in Berlin for months. In addition to the Economics Ministry, the Chancellery has also signaled that it wants to accommodate Intel, government officials report. But Lindner is by no means willing to do so. There is talk of “violent negotiations” in government circles. At the same time, the Commerce Department is trying to narrow Intel’s cost gap in other ways. Discussions with energy suppliers should enable cheaper electricity and water purchases, for example.

Time is running out. Government circles report that talks with Intel are now entering a final phase. CEO Pat Gelsinger is expected to hold further talks in Germany this week.

Lindner had already expressed skepticism about possible financial aid for the chip factory in February. “We cannot be blackmailed,” he said in an interview with the Handelsblatt at the time. For him, 6.8 or more billion euros from German taxpayers is “not a sure-fire success”.

According to FT, Lindner also made it clear that he would reject more aid even if Intel increased the scope of the project. “The Chancellery and the Ministry of Economic Affairs will have to show where the additional funding is to come from.”

Union disagrees

The traffic light coalition has been struggling for a long time over the 2024 budget. The debt brake anchored in the Basic Law is to be observed again. To do this, additional costs due to the collective bargaining agreement in the public sector and higher interest rates must be compensated.

For this reason, surprising tones come from the Greens parliamentary group. Their chief householder, Sven-Christian Kindler, shares the finance minister’s reservations. “The federal government is well advised to stay within the current budget framework,” Kindler told the Handelsblatt. “An increase would be difficult to budget for and at the same time no longer justifiable in terms of the cost-benefit ratio of an individual subsidy for a single company.”

The opposition, on the other hand, is divided. The chairman of the Economic Committee in the Bundestag, Michael Grosse-Brömer, also sees it like Lindner. “In view of the current level of debt, it is right if the finance minister intends to ensure a solid budget that complies with the debt brake,” said the CDU politician. “In any case, it will not be possible to make Germany permanently attractive as a business location through state subsidies.”

>> Read also: Heated debate about Intel: Saxony-Anhalt’s Economics Minister Schulze against IWH President Gropp

Objection comes from Union faction Vice Jens Spahn. “The federal government must approach Intel and ensure that the project is implemented,” he said.

The SPD economic politician Sebastian Roloff called for rapid clarity about possible state financial aid. “I would like to see an understanding between Intel and the federal government so that progress can be made quickly here,” said the member of the Bundestag and co-leader of the SPD Left Party. In principle, the settlement of Intel in Magdeburg is very welcome. However, the higher costs are currently presenting “great challenges” for everyone.

In addition to the federal government, the European Union has also been trying for months to attract American and Asian chip manufacturers with subsidies running into the billions. The background is also the desire to become more technologically independent of China.

To this end, the EU has launched the “European Chips Act” – a package of subsidies totaling 43 billion euros. The EU wants to double the production capacity for chips by 2030 in order to catch up with Asia and the USA.

More: Dispute on Intel’s settlement in Magdeburg – “We would get more out of it if we built an East German Harvard”